New/Not New Legislation and Deductions/Exemptions Daniel Shackle - - PowerPoint PPT Presentation
New/Not New Legislation and Deductions/Exemptions Daniel Shackle General Counsel May 2018 1 Disclaimer This presentation and other Department of Local Government Finance materials are not a substitute for the law! This is not legal advice,
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the overall expenditure rate by the amount of the adopted county jail tax rate.
expenditure rate above the maximum allowable total expenditure rate.
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16 may file an exemption application up to 30 days following the April 1 application deadline if the person pays a late filing fee.
tax year to the homestead property data base on or before March 15 of each year, in a manner prescribed by the DLGF.
references throughout the IC to the county board of tax adjustment. Largely a technical correction, as no county boards of tax adjustment exist.
not later than five business days after the budget is due.
by the DLGF may not take effect before March 1 or after July 31 of a particular year. THIS IS NOT CURRENT LAW!!
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(1) a deduction or exemption that is specific to an improvement shall be applied only to the assessed value allocation pertaining to that improvement; and (2) to the extent that a deduction or exemption is not specific to an improvement; the deduction or exemption shall be applied in the order that will maximize the benefit of the deduction or exemption to the taxpayer.
for tax increment financing purposes includes the net residential assessed value within the allocation area, as finally determined for the current assessment date. THIS IS NOT CURRENT LAW!!
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Regarding the Under $20,000 Business Personal Property exemption (IC 6-1.1-3-7.2):
personal property.
claiming a deduction, it should only be applied in the tax district in which the majority value of the taxpayer’s personal property is located within the county.
tax return that the taxpayer is entitled to the exemption, the county shall include the penalty on a property tax bill associated with the tax district in which the majority value of the taxpayer's business personal property within the county is located. (See IC 6-1.1-37-7(f))
THIS IS NOT CURRENT LAW!!
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property tax deduction and credit reapplication requirements that were added by HEA 1450-2017 concerning unmarried taxpayers who married, married taxpayers who divorced, and taxpayers who came to own their property jointly or as tenants in common with another individual. (See IC 6-1.1-12- 17.8.)
includes greater compensation for the presiding officer or secretary of the county fiscal body or county executive taking
THIS IS NOT CURRENT LAW!!
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individual's other elected official training requirements .
provide:
training paid for from the fund; and
sufficient funds are appropriated by the county fiscal body.
training course expenses. THIS IS NOT CURRENT LAW!!
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committee the task of studying replacement of the local income tax law under IC 6-3.6-6 with a new local income tax law that would include the following local income tax provisions:
each enact a property tax relief tax rate .
each enact an expenditure rate. Maintaining the local income tax special purpose rates but providing that a political subdivision may not pledge any tax revenue received under the new local income tax law for debt payments except under a special purpose rate.
study committee the task of studying the issue of whether property taxes imposed due to a referendum should be eligible for local income tax property tax relief credits. THIS IS NOT CURRENT LAW!!
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(1) the individual served in the military or naval forces of the United States during any of its wars; (2) the individual received an honorable discharge; (3) the individual has a disability with a service connected disability of 10% or more; (4) the individual’s disability is evidenced by: (A) a pension certificate, an award of compensation, or a disability compensation check issued by the United States Department of Veterans Affairs; or (B) a certificate of eligibility issued to the individual by the Indiana Department
disability qualifies the individual to receive a deduction; and (5) the individual: (A)
(B) is buying the real property, mobile home, or manufactured home under contract; (C)
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(1) the individual served in the military or naval forces of the United States for at least 90 days; (2) the individual received an honorable discharge; (3) the individual either: (A) has a total disability; or (B) is at least 62 years old and has a disability of at least 10% (need not be service-connected); (4) the individual’s disability is evidenced by: (A) a pension certificate or an award of compensation issued by the United States Department of Veterans Affairs; or (B) a certificate of eligibility issued to the individual by the IDVA after it has determined that the individual’s disability qualifies him or her to receive this deduction; and (5) the individual: (A) owns the real property, mobile home, or manufactured home; or (B) is buying the real property, mobile home, or manufactured home under contract;
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deductions must file a statement with the auditor of the county in which the individual resides (more appropriately, the individual should apply to the auditor
all of the vet’s Indiana property.
January 5.
manufactured home that is not assessed as real property, the statement must be filed during the 12 months before March 31 of each year for which the individual wishes to obtain the deduction.
postmarked on or before the last day for filing. The statement must contain a sworn declaration that the individual is entitled to the deduction.
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auditor for the auditor’s inspection: (1) a pension certificate, an award of compensation, or a disability compensation check issued by the United States Department of Veterans Affairs if the individual claims the partially disabled veteran deduction; (2) a pension certificate or an award of compensation issued by the United States Department of Veterans Affairs if the individual claims the totally disabled veteran; or (3) the appropriate certificate of eligibility issued to the individual by IDVA if the individual claims either deduction.
guardian shall file the statement.
contract or memorandum of the contract is recorded, if applicable.
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veteran satisfied the eligibility requirements of these deductions at the time of his or her death and the surviving spouse owns or is buying the property under contract at the time the deduction application is filed. The surviving spouse is entitled to the deduction regardless of whether the property for which the deduction is claimed was owned by the deceased veteran or the surviving spouse before the deceased veteran’s death.
the surviving spouse shall provide the documentation necessary to establish that at the time of death the deceased veteran satisfied the requirements of IC 6-1.1-12-13 or IC 6-1.1-12-14, whichever applies.
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around $143,000. Now it is $175,000 for AV. Does the old application qualify them for $175,000 AV or will they need to refile?
among others, to be carried over to the following assessment date if the taxpayer remains eligible for that deduction. If a taxpayer was eligible for the veteran’s deduction (under IC 6-1.1-12-14) when the AV cap was set at $143,160, then as long as the property’s AV remains below the new threshold of $175,000 and the taxpayer is otherwise eligible to keep the deduction, then the taxpayer does not need to refile.
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which both are disabled, do they both receive the disabled deduction?
deductions on their tax bill? The disabled deduction, unlike the homestead deduction or the mortgage deduction, is tied to the individual and not the property. Hence, two individuals that jointly
to that property. Similarly, because the veteran’s deduction is tied to the individual and not the property, two individuals that jointly
to that property.
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applicant is now deceased. Do we remove the deduction?
9(f) if (1) the surviving spouse is at least 60 years old on or before December 31 of the year preceding the year the deduction is claimed; (2) the deceased spouse was at least 65 years old at the time of death; (3) the surviving spouse has not remarried; and (4) the surviving spouse
surviving spouse must still apply for the deduction. If the deceased spouse died after January 1, the deduction remains on the property until the next assessment date. The surviving spouse must file for the deduction for the next assessment date. If the deceased spouse died on January 1, the surviving spouse would have to timely file for that assessment date to retain the deduction.
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Heritage Barn (see IC 6-1.1-12-26.2)
barn was constructed before 1950. Moreover, the auditor must apply the deduction to a heritage barn that received the deduction in the preceding year unless the auditor determines that the property is no longer eligible for the deduction because the barn was not constructed before 1950. Statute did not previously include this phrase. The Department understands this to mean that if Barn A qualified for and received the heritage barn deduction under the previous version of the law on January 1, 2016, but Barn A is not a mortise and tenon barn, Barn A will NOT lose the deduction for January 1, 2017 since Barn A was built before 1950. It is still the case that this deduction terminates following a change in ownership of the heritage barn (if John sells Barn A to Bob, John’s heritage barn deduction is removed for the following assessment date and Bob must apply in his own name). Generally, however, the only basis an auditor has now for removing a heritage barn deduction from a heritage barn already receiving it is if the auditor determines that the barn was not constructed before
barns for which the deduction is initially granted are in fact eligible.
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In 2016, we had 6 people apply for the Heritage Barn Deduction. They were approved by the assessor and paid the $50 fee and received the deduction for pay 2017. Do we need to annually notify the recipients of this deduction to let them know they need to come in and reapply if they want to receive this deduction next year? IC 6-1.1-12-26.2(e) states in part that “A person that receives a deduction . . and that remains eligible for the deduction in the following year is not required to file an application for the deduction in the following year.” Unless the auditor determines that the deduction should be taken off the property, the law requires the deduction to remain on as long as the property remains eligible. Also how do we disperse those monies at settlement? IC 6-1.1-12-26.2(f) requires that the auditor apply the fee money “equitably among the police and fire departments in whose territories each heritage barn is located.” So if, for example, the territory in which a heritage barn is located has a police department and a fire department, the fee for that heritage barn is divided evenly (that is, $25 to each department).
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26, 27.1
collect, store, or distribute solar energy; and
invoices or other evidence of purchase and installation.
system should be used for hot water or space heat (including pool water) or preheating for industrial processes.
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property, the deduction equals the AV of the device.
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to utilize the kinetic energy of moving air to produce electricity.
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mechanical energy or to produce electricity.
again.
purchase the property on the date the certified statement is filed with the auditor.
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1.1-12-34, 35.5
water, produce electricity, or generate heating or cooling.
again.
purchase the property on the date the certified statement is filed with the auditor.
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not know what portion of the currently land AV that will be eventually allocated to the 1% land AV bucket?
2% bucket. The 1 acre AV (max) for the future home is not yet separated
the 1 acre?
homestead deduction on land which was vacant or had a dwelling that was not completely built as of the assessment date. This provision also provides that this land is to be considered a homestead for purposes of the supplemental deduction and the property tax caps.
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IC 6-1.1-12-37(p) (p) An individual is entitled to the deduction under this section for a homestead for a particular assessment date if: (1) either: (A) the individual's interest in the homestead as described in subsection (a)(2)(B) is conveyed to the individual after the assessment date, but within the calendar year in which the assessment date occurs;
(B) the individual contracts to purchase the homestead after the assessment date, but within the calendar year in which the assessment date occurs; (2)
(A) the property on which the homestead is currently located was vacant land; or (B) the construction of the dwelling that constitutes the homestead was not completed; and (3) either: (A) the individual files the certified statement required by subsection (e); or (B) a sales disclosure form that meets the requirements of section 44 of this chapter is submitted to the county assessor on or before December 31 of the calendar year for the individual's purchase of the homestead.
under this section for the homestead for the assessment date, even if on the assessment date the property
constitutes the homestead was not completed. The county auditor shall apply the deduction for the assessment date and for the assessment date in any later year in which the homestead remains eligible for the deduction. A homestead that qualifies for the deduction under this section as provided in this subsection is considered a homestead for purposes of section 37.5 of this chapter and IC 6-1.1-20.6. (Underline added.)
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(i.e., the surrounding 1 acre) is considered the “homestead” under IC 6- 1.1-12-37(p), the acre must be separated out from any “non-homestead” acreage and be given the 60% deduction amount as well as be placed in the 1% bucket.
in the 2% bucket and the 1 acre will be put into the 1% bucket and be given the homestead deduction amount.
the acre can be identified. Where there is no partially completed dwelling, local control governs as to which is the surrounding 1 acre to apply the homestead deduction on.
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IC 6-1.1-36-17(b)
standard deduction under IC 6-1.1-12-37 in a particular year within three (3) years after the date on which taxes for the particular year are first due, the county auditor may issue a notice of taxes, interest, and penalties due to the owner that improperly received the standard deduction and include a statement that the payment is to be made payable to the county auditor. The additional taxes and civil penalties that result from the removal of the deduction, if any, are imposed for property taxes first due and payable for an assessment date occurring before the earlier of the date of the notation made under subsection (c)(2)(A) or the date a notice of an ineligible homestead lien is recorded under subsection (e)(2) in the office of the county recorder. The notice must require full payment of the amount owed within: (1) one (1) year with no penalties and interest, if: (A) the taxpayer did not comply with the requirement to return the homestead verification form under IC 6-1.1-22-8.1(b)(9) (expired January 1, 2015); and (B) the county auditor allowed the taxpayer to receive the standard deduction in error; or (2) thirty (30) days, if subdivision (1) does not apply. With respect to property subject to a determination made under this subsection that is owned by a bona fide purchaser without knowledge of the determination, no lien attaches for any additional taxes and civil penalties that result from the removal of the deduction. (Underline added.)
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